Saturday, May 26, 2007
The California State Bar Court recently held the the failure of an attorney seeking reinstatement to prove that he had paid the costs of prior proceedings does not automatically preclude consideration for reinstatement. The attorney had declared bankruptcy but failed to list the state bar as a creditor. The court concluded that proof of payment of costs is not jurisdictional but rather one of many factors to consider in addressing the merits of the petition for reinstatement. The hearing officer erred in granting bar counsel's motion to dismiss.
There was a D.C. case a few years ago that held that the failure to make restitution to injured parties was a basis for dismissal of a reinstatement petition. (Mike Frisch)
The Maryland Court of Appeals rejected the contention that discipline should not be imposed in a case where the accused attorney had contended that his conduct was unrelated to the practice of law. The attorney was also a licensed title insurance agent, which took 80% of his time and generated 80% of his income. The rest of his practice involved estate and real estate matters. He became involved in a contested matter that had both estate and real estate aspects. Entrusted funds were mistakenly released by him to his client. Here, the court reviewed de novo the question whether the conduct related to legal practice and concluded that it did. Indefinite suspension with the right to apply for reinstatement after 60 days. (Mike Frisch)
Friday, May 25, 2007
An attorney who was convicted in Georgia of aggravated assault and had voluntarily surrendered his Georgia license was disbarred by the New York First Judicial Department. The assault was committed on the attorney's girlfriend with a vacuum, beer bottle and a mop. The items were recovered by the police with the victim's blood on them. He also had kicked the victim. New York found that the felony conviction automatically operated to disbar the attorney. (MIke Frisch)
The North Carolina Court of Appeals affirmed the dismissal of ethics charges against a former District and Assistant District Attorney who were alleged to have made promises to a witness in a murder case and withheld the information from defense counsel and the trial court. The defendant was convicted and sentenced to death. The conviction was reversed when the information surfaced. The court here held that two of the charges of ethical misconduct were time barred. A third charge was found to not state a claim of an ethical violation.
Most jurisdictions do not have a statute of limitations for ethical complaints. Because the law license is a continuing proclamation of the court's confidence in the attorney's fitness to practice, limitations are deemed detrimental to the integrity of the legal profession and the public interest in an ethical bar. The disposition of this case makes the point. As North Carolina has a history of leniency for prosecutorial misconduct, it will be interesting to see how the Nifong charges are resolved. (Mike Frisch)
The Massachusetts Supreme Judicial Court affirmed the order of a single justice disbarring an attorney for misappropriation of client funds. The court rejected the contention that any delay in the proceedings was a basis to avoid the otherwise appropriate discipline. The delays were justified because the Bar Counsel was investigating a series of ethical complaints and were, in part, an accommodation to the lawyer's schedule. Because the ultimate issue in any bar discipline matter is the present fitness of the accused lawyer to practice law, delay only merits consideration if there is prejudice in the ability to defend against the charges. (Mike Frisch)
Ohio has a rule that requires that an attorney who employs a suspended or disbarred former attorney as a paralegal notify Disciplinary Counsel of the arrangement. A lawyer who violated the provisions of this rule was reprimanded by the Ohio Supreme Court. The lawyer also had a self-laudatory web page ("he's the most qualified lawyer in Ohio to take your case") that included a 10% discount coupon that a prospective client could print out and use for a consultation. The web page had been designed by an outside company and the coupon was inserted by a subordinate employee without the lawyer's knowledge. (Mike Frisch)
A solo practicioner who is suspended from practice is required, as are all suspended lawyers, to comply with rules relating to notification of clients, opposing parties and courts and withdrawal from all pending matters. A short suspension of a lawyer who has no partners to assume the active cases can destroy a law practice. Some jurisdictions require that the lawyer file an affidavit demonstrating compliance with these obligations. In D.C., the suspension is not deemed to commence, for purposes of reinstatement eligibility, until the affidavit is filed. Some lawyers never file the affidavit, and thus never get credit for the time served.
The Illinois ARDC Review Board just decided a disciplinary case that involved a solo with an active family law practice. The Board found that the lawyer, after suspension, had failed to comply with the requirements imposed on a suspended attorney. The Board recommends a suspension of six months. The Board rejected the contention that the lawyer had relied on advice of counsel in the post-suspension conduct as a defense.
A lawyer who is suspended and continues to practice law in violation of the order of suspension may also be subject to charges of criminal contempt. The penalty for such unauthorized practice may involve imprisonment. (Mike Frisch)
Thursday, May 24, 2007
The Arizona Supreme Court rejected proposed discipline against a judge who was habitually tardy in arriving at court and had mistreated staff. The judge had a prior record of such misbehavior. The Commission on Judicial Conduct had improperly considered the impact of suspension from the bench on the judge's retirement benefits. Because the matter had been presented on agreed facts and discipline, the court remanded the case for a proceeding that will not take the financial impact issue into consideration. (Mike Frisch)
The Florida Supreme Court rejected a referee's recommendation for diversion in a disciplinary case where the attorney had been charged with misconduct in defending a dog bite case. The allegations involved his dealings with a treating doctor and taking advantage when he received medical records by mistake. The records, which were admitted by stipulation, contained an entry not on copies attached to the witness' earlier deposition. A jury award had been overturned by the district court based on a finding that the trial court had abused its discretion by admitting the medical record that contained the unfavorable notation. The district court "condemn[ed] the actions of defense counsel as to both the contact with [the doctor] and the strategic concealment of [the] records."
The Florida Supreme Court found that the lawyer had engaged in "sharp practice" and that his conduct "offends our well-recognized policy that cases should be decided on the merits and not by a lawyer's stooping to sneaky or underhanded trial tactics." The court concluded that the misconduct was not "minor" and that diversion was thus inappropriate. The lawyer was ordered to appear before the Board of Governors of The Florida Bar to receive a public reprimand. (Mike Frisch)
A law firm that sold condominium office space in proximity to the law office sold to a hair salon. The law firm sued when a "dispute arose because the odor of permanent solution migrated from the...hair salon... into common areas of their condominium office spaces, as well as into [plaintiff law firm's] offices." The condition has persisted since 1992. Prior to litigation, the parties had entered into an agreement that provided that the hair salon take "such steps as are necessary to ensure chemical and other odors do not escape...." The district court found that an open space between the floor joists or the ceiling joists "was the cause of the odor migration and that it was not possible to remedy it." Judgment for the hair salon was affirmed by the Wyoming Supreme Court. (Mike Frisch)
Posted by Jeff Lipshaw
Gordon Smith at Conglomerate posted a follow up by Bob Lawless (Illinois, right) from the Law of Entrepreneurship conference at Wisconsin. I just posted a comment over there that I am going to repeat here, because I think it invokes a meta-issue about law and society, or here, simply law and business, or lawyers and business people.
After reading Gordon's essay on whether courts mattered to entrepreneurship, I put together a little essay that started with the law of the horse issue (see Frank Easterbrook on whether there is a law of the horse). I don't doubt that entrepreneurship is a distinctive field of study; my skepticism is whether the law of entrepreneurship is a distinct discipline. (If so, perhaps Gordon has already pre-empted most of the area in which it does seem to be a distinct area - the down-round - in his analysis of the Benchmark case.) And my initial reaction in the essay (clearly an early-stage thought piece) was that I needed to dig deeper than what seemed to be mere categorization. That is, my intuition is that lawyers and entrepreneurs, by and large, are ships passing in the night, for very fundamental reasons about the way they see the world, and what is important to them in terms of risk, finitude and open-endedness, and the allocation of property versus the allocation of liability. That early stage "auto-brainstorming" morphed into something that I brown-bagged at Tulane called "ABOUTNESS, THINGNESS, VISCOSITY, AND THE ONTOLOGY OF FORMAL SYSTEMS IN LAW." (Faculty members are still scratching their heads, I'm sure.) But as I read recently on somebody's blog somewhere, just when I think I have it, it slips away from me again. Pardon the self-promotion, but I think the topic is fascinating (obviously) and the thought piece is still sitting out there: "Why the Law of Entrepreneurship Barely Matters".
A law firm partnership agreement was amended by majority vote in a manner that impacted on compensation to withdrawing partners. The New York Court of Appeals upheld an Appellate Division decision holding that the amendment was proper because "the agreement, by its terms, unamiguously permits amendments thereto by majority vote."
Former equity partners at Fish & Neave, an intellectual property firm that has since merged with Ropes & Gray, had sued both firms after the firm had changed its accounting system in a manner that affected the compensation due to departing partners. The change had been implemented to attract potential lateral partners or a merger opportunity. Two lawyers who left after the amendment had been passed sued claiming, among other things, that the amendment should be invalidated. The court held that the amendment was properly implemented by majority vote because the agreement clearly provided that all partnership questions be resolved in a such a manner. (Mike Frisch)
Wednesday, May 23, 2007
Posted by Jeff Lipshaw
Over at Conglomerate, Christine Hurt has a nice summary of and take on the Sergey Brin/Google investment in his wife's startup. The comments are already starting to look a little bimodal, so I'll throw in my two cents that this is a wonderful example of how subtle decisions in the real world can be.
As Christine points out, this is a really tough call. If in fact Brin thought it was a great investment, he's doing Google shareholders a favor by allowing them to participate. Hence, it's possible that his intent is pure.
Indeed, given that Google invests in startups, if this weren't his wife/girlfriend, and he had only invested his own money, would he have breached his fiduciary duty to Google by misappropriating a corporate opportunity?
On the other hand, if Brin has provided an advantage to his spouse that he would not to the spouse of any other employee in the company, that has an odor to it.
But he did the right things. The investment was discussed in the board and at the audit committee. Money is coming into the venture from other VCs, and credible sources like Genentech. If Google has an avenue in which employees can feed investment possibilities to the corporate development group, I'd say a good bit of the odor goes away. It would have been an interesting situation in which to be the corporate governance lawyer.
Bill Henderson discusses this bold new step taken at Indiana over at ELS Blog, here, and here is a post from Legal Ethics Forum's John Steele on it. I think Southwestern has something similar and required, but in any event we welcome comments on that and other similar innovations or expansions. [Alan Childress]
Tuesday, May 22, 2007
The Supreme Court of New Mexico denied admission to a bar applicant who had been a medical doctor. He had lost his medical license in California and Washington State as a result of a drug conviction. After reinstatement, he again lost his medical license in California for misconduct. He had declared bankruptcy, been involved in 21 lawsuits, given legal advice without a license and had engaged in numerous dishonest acts, including false statements concerning the bills of the attorney who represented him in the admissions matter. Washington State denied him a law license; New Mexico had no difficulty in reaching a like result. (Mike Frisch)
Posted by Alan Childress
This new website provides links to most states' membership sites and allows the public and lawyers to check to see whether someone is really a lawyer--actually holds a valid and active license. Hat tip to Carolyn Elefant at MyShingle. Carolyn also posts on a useful D.C. bar event May 24 on contract lawyering and outsourcing.
Posted by Jeff Lipshaw
Steven Davidoff at our sister blog M&A Prof Blog has a post on the Blackstone Group IPO, which includes a disclosure in the S-1 that Simpson, Thatcher partners will buying up units that account for less than 1% of the offering. Simpson, Thatcher is counsel to the company; Skadden is representing the underwriters.
I'm not sure this bothers me particularly. Underwriters' counsel will be looking out for disclosure issues as well, and the question will be whether Simpson's judgment in advising Blackstone would be affected by some of the lawyers having a stake in the offering going forward. Certainly there would be few clients more sophisticated than Blackstone, and hence capable of a knowing consent to Simpson's continued representation of the company even in the face of a potential conflict. Moreover, I don't see that Simpson is taking the units in lieu of fee compensation; simply some of the lawyers are buying in.
Far more problematic, I think, is the question whether lawyers take stock in start-up companies in exchange for fees. We spent a day on that question in the venture capital seminar I taught at IU-Indianapolis. On one hand, entrepreneurs are unlikely to have the cash to pay standard fees and the arrangement facilitates getting a better grade of lawyer; on the other, there's a far greater self-interest issue. (HT to Peter Henning.)
Posted by Jeff Lipshaw
I have decided to go public with the fact that we have been trying to entice the esteemed David Luban (Georgetown, left), a friend, colleague, and neighbor of Mike Frisch, to do the occasional guest-blogging stint over here at LPB. There is, of course, far more in it for us than for David, as he brings more credibility and readership to us than we would bring to him. I'm not quite sure where we stand in this intense negotiation (we offered to let him go home when he wasn't blogging, a la Roger Clemens), but David has significant commitments, including his contributions to Balkinization, and we are happy to take whatever we can get.
This morning, David suggested we cross-post his Balkinization comments on speculation whether then Counsel to the President Gonzales violated Texas ethics rules by his involvement in the attempt to get then AG Ashcroft to sign off on the illegal wiretaps. (I should note they include a quote from our own Nancy Rapoport which includes the "would my mom be proud?" corollary to the "front page" test discussed below.) David's comment are typically subtle: the issue is not whether there was obstruction of justice (there probably wasn't) but whether the whole thing involved a plan to deceive not Ashcroft but others:
According to Comey, Ashcroft rose up off his pillow to remind Gonzales and Andrew Card that Comey, not Ashcroft, was the acting attorney general. They knew that, of course. Their aim was apparently to get Ashcroft’s legally-meaningless signature – meaningless, because at that time he was not exercising the powers of the attorney general – so they would have a document that made it wrongly seem that the attorney general had signed off on the program. If Marty's speculation is right, the AG’s signature was important to reassure telecom companies cooperating with the program that doing so was on the right side of the law.
But suppose that wasn’t Gonzales's and Card's reason for seeking Ashcroft’s signature. The fact remains that any use of the signature would have been, quite simply, fraudulent - at least, if it falsely suggested that Ashcroft's legal authority as AG attached to what he was signing . The Texas rules forbid lawyers from engaging in conduct that involves dishonesty, fraud, deceit, or misrepresentation. Steve Gillers focuses on their attempt to deceive Ashcroft. But the more significant violation lies in trying to get Ashcroft’s signature for purposes of deceiving others. Deceiving others with a fraudulent document would amount to a mammoth political hoax; deceiving the ailing Ashcroft would have been "only" a small bit of foulness.
And as long as you are over there, check out the links to You Tube on this subject in the Marty Lederman post just below. And remember: leave the gun; take the cannoli.
Petitions for reinstatement by suspended or disbarred lawyers sometimes present a dilemma for disciplinary decisionmakers. The hope for rehabilitation and restoration must be balanced against the potential for future damage to clients, the courts and the legal profession. The Illinois Review Board recently recommended that reinstatement be denied to an attorney who had been admitted to practice in 1962 and had had a number of disciplinary sanctions imposed against him. The most recent disciplinary cases had imposed a fixed suspension with a UFO requirement (I assume that means "until further order of the court" rather than that the sanction be served in an extraterrestrial manner). The majority found reinstatement inappropriate because the lawyer failed to appreciate the wrongful nature of his conduct. A dissent notes the extensive and impressive character testimony and wonders what more the attorney could have presented to reinvest the courts with confidence in his integrity. (Mike Frisch)